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http://finance.yahoo.com/career-work...europe-nytimesAmerican Retailers Try Again in Europe
The new Abercrombie & Fitch store on the Champs-Elysees in Paris has drawn big crowds since opening last month.
On a recent Sunday afternoon, the Champs-Elysees was packed with people enjoying this city's most famous boulevard -- window shopping, sipping wine at sidewalk cafes and strolling toward the river with ice cream cones.
Then there were the 150 people waiting to get into an American retail chain store. And that was one of the shortest lines since the store, Abercrombie & Fitch (NYSE: ANF - News), opened here last month.
Abercrombie is the latest in a stampede of American retailers opening in Europe. The expansion is based on a major shift in how young Europeans think about American fashion. In countries where protests against globalization were common a decade ago, American retailers are being welcomed by screaming fans and their credit cards.
"Young people here don't think badly about America -- we're American in our heads," said Mathilde Feuille, 17, who waited about four and a half hours the day the Abercrombie store first opened. "We watch all the U.S. television series: 'Gossip Girl,' 'Glee,' 'Vampire Diaries.' "
Across Europe, tailored sweatpants and frayed oxfords -- American casual -- are replacing Chanel jackets and knotted scarves as the clothes many teenagers aspire to own, according to fashion and retail analysts. And while the European stores account for only a small percentage of sales, they tend to bring in higher profits, as discounting is not as expected, and the overall price of garments tends to be higher in Europe.
Banana Republic will open its first French store later this year. Gap (NYSE: GPS - News) opened last year in Milan, and will open this year in Rome. Tommy Hilfiger and Michael Kors have built gigantic Paris flagship stores, while Tory Burch just opened its first Rome store. Even Victoria's Secret is making the plunge, opening its first shop outside North America next year in London.
"The Internet helps break down some of the language barriers, and makes brands a little bit more transportable across borders," said John D. Morris, a retail analyst with BMO Capital Markets.
This is not the first time Americans have tried to master European retailing. In the mid-1990s, American brands like Gap and Talbots expanded into Europe. But, said John Long, a retail strategist at the consulting firm Kurt Salmon, they found rent was too high, regulations were too onerous and the demand just wasn't there. By the early 2000s, Gap had closed its German stores and Talbots got out of Europe altogether.
Now, many retailers believe they have too many stores in the United States, but still want to increase sales, so opening European locations is an obvious solution, Mr. Morris said. Europe is a relatively easy place to go -- Asia, while also an attractive market, generally requires different store formats, sizes and designs, while American gear can typically be sold unaltered in Europe.
And the fierce loyalty to European brands no longer exists, especially among the newest generation of consumers.
"They are becoming more cosmopolitan because they are citizens of the world, living contemporary lives that are in tandem and no longer as a continuous fight among cultures," said Armando Branchini, the president of InterCorporate, a Milan-based luxury goods and retail consultancy, of young Europeans.
Also, the long absence of many American brands has helped increase their allure, said Jean-Noel Kapferer, a professor at the HEC School of Management in Paris. It has been a sign of status, he said, that Europeans had to go to New York to shop at Abercrombie or Tommy Hilfiger.
Still, almost all of the American clothing can be ordered online. So retailers are going to great lengths to attract shoppers to their new European stores.
In early May, before Abercrombie's store opened here, the Columbus, Ohio-based company flew in more than 100 male models to parade shirtless, jeans slung just above the groin, in front of the 31,000-square-foot store. While teenagers screamed, older, more soigne Parisians looked on with an air of disdain. Soon, authorities descended and ordered Abercrombie to clothe its models, citing regulations that bar partial nudity on the Champs-Elysees.
Even without bare-chested models, the Abercrombie store is a sight -- "retail theater," as Eric Cerny, an Abercrombie spokesman, described it; something that "anybody in retail has to see," said Mr. Morris, the analyst.
Shoppers enter through iron gates that are flanked by male models, walk down a path of precisely raked butter-colored gravel lined with trees, and turn the corner to enter the building.
Inside, a four-story staircase serves as an artery connecting glass display cases stuffed with jeans, stacks of faded T-shirts, and a perfume bar for sampling fragrances. Abercrombie pumps its Fierce scent throughout the store, along with techno versions of '80s songs, giving it the feeling of an underage dance club.
The walls, ceilings and floors are painted black. Pairs of dancing models are stationed inside, all dressed in a uniform (boys: checked shirt with the right shirttail tucked in, cuffed jeans, flip-flops; girls: flouncy top, thin cardigan, rolled-up jean-shorts, flip-flops.) Their speech, too, is uniform, as they are required to greet shoppers with the same phrase -- on this Sunday, it was "Hey, what's going on," with a heavy French accent.
It was so crowded, especially around the fitting rooms, that sidling through each floor was difficult. Abercrombie would not disclose sales data, but an employee at the Paris store said sales had risen each week since the opening.
Nonetheless, there were still worries that globalization was erasing cultural heritage. Walking past the Abercrombie store on opening day, Anne Marie and Roland Pujol, a French couple in their late 50s, paused. "American culture is O.K., but we still must safeguard the French culture," Mrs. Pujol said. "We have traditions that are very important."
It was an attitude that did not extend to 17-year-olds like Eglantine Bonnet, who was waiting in line. "Globalization might have been an issue for our parents, but it is not a problem for us," she said as she scrolled through an English-language Abercrombie blog on her iPhone.
As for Ms. Feuille, another young shopper, she seemed most interested in getting a photo with an American model. But she also said she was impressed by the clothes.
"But no flip-flops," Ms. Feuille said, pointing to the brown thongs worn by the models. "We're not ready for that yet. It's still too casual."
